Research Update: HealthChannels Intermediate HoldCo Upgraded To 'CCC' From 'SD' After Distressed Repurchases Below Par; Outlook Negative

We continue to believe HealthChannels Intermediate HoldCo LLC's capital structure is likely unsustainable due to continued operating challenges and believe future subpar repurchases are likely. We raised the issuer credit rating on HealthChannels to 'CCC' from 'SD' (selective default). Our 'D' issue-level rating on the company's $385 million ($333.2 million outstanding) first-lien term loan is unchanged until we believe the risk of additional distressed debt repurchases is remote, following the company's multiple below-par repurchases of the debt. Our negative outlook reflects our view that operational headwinds resulting in minimal cash flow generation in 2024 could amplify refinancing risk for the April 2025 term loan. It also reflects the heightened risk of further debt repurchases below par within the next 12

...- We continue to believe HealthChannels Intermediate HoldCo LLC's capital structure is likely unsustainable due to continued operating challenges and believe future subpar repurchases are likely. - We raised the issuer credit rating on HealthChannels to '###' from '##' (selective default). - Our 'D' issue-level rating on the company's $385 million ($333.2 million outstanding) first-lien term loan is unchanged until we believe the risk of additional distressed debt repurchases is remote, following the company's multiple below-par repurchases of the debt. - Our negative outlook reflects our view that operational headwinds resulting in minimal cash flow generation in 2024 could amplify refinancing risk for the April 2025 term loan. It also reflects the heightened risk of further debt repurchases below par within the next 12 months, which we would likely view as tantamount to default....

Research Update